Connecticut's Perpetual Pension Crisis

Connecticut has a Perpetual Pension Crisis.  It is a crisis of its own making and State government is responsible.  There are several reasons why Connecticut is in such a mess with its pensions.  These reasons include horrific and sometimes nonexistent returns on its pension investments, as Connecticut recently ranked next to last out of all fifty states in the country.  However, keep in mind that this crisis has been years in the making as appointed and skill-less Connecticut State Treasurers have picked pension managers with more regard to political patronage rather than their ability to invest money with greater returns, and the taint has spread to about all political actors responsible across the aisle.  As just one example, we can look back at the scandal involving former Connecticut State Treasurer Paul Silvester as an example and his subsequent prison sentence for kickbacks.  Connecticut also pays out some of the highest pensions in the country in all categories including teacher pensions, municipal pensions, and state employee pensions.  Some who are retired from the state even get their Medicare premiums reimbursed by the state.  Further, state representatives and state senators have become masterful over time in laying low to play out the clock to the pension vesting line. Viewing this myriad of ills, legendary fraudster Charles Ponzi could not design a financial mousetrap as precarious and unsure as the state pension plan of Connecticut.

The fundamental problem with these generous pensions is that they are constantly underfunded.  However, the amount of unfunded pension liabilities seems to vary.  I have written at length in the past that Connecticut has $100 to $150 billion dollars’ worth of short- and long-term debt along with unfunded liabilities.  Other estimates range that the amount of unfunded pension liabilities is from $30 to $50 billion dollars with an accepted amount being roughly $40 billion dollars.  Connecticut has seen this figure rise dramatically over the years while economically illiterate Connecticut Democrats feel that $7.7 billion dollars paid into the fund to pay down the enormous debt has gone a long way to fixing all ills.  Figures that have been thrown at the poor sucker Connecticut Taxpayers responsible for all of the debt in the state now show budget surpluses being shrunken in part to the ending of Covid-19 funds and the severe economic recession we endure caused by massive runaway inflation occurring due to the economically incoherent and ridiculous economic policies of the Democrat Biden Administration.

I submit unto you that Connecticut has a spending problem as it cannot tax enough aspects of our personal and business lives to cover that same spending.  Budgets always come and go with a maximum increase in state spending as the almost comical "fiscal guardrails" consisting of spending caps implemented over the years kick in.  However, to work around this fictional safety net, money spent on many occasions just falls off budget and is forgotten until the time comes for Connecticut Taxpayers to pay for it through yet even higher taxes and for added items, services, and crony support. Therefore, spending cap in my observation is normally ignored.  Much more egregiously, Connecticut has a habit of spending to excess with pensions. Connecticut Taxpayers are forced to live within their means and a strict budget especially during these Democrat Party induced runaway inflation times.  However, State government fights fiscal restraint at every turn since political patronage spending is built into the state budget, followed by the continual progression of handing state jobs and nonjobs to the politically favored, thereby growing the pension deficit to new stratospheres.

Unfortunately, little can be done to undo the commitment of past pension obligations, but there are several things Connecticut can do to make the future brighter. The biggest solution that can be afforded Connecticut's constant pension crisis is to properly fund it and hire a non-politically affiliated investment company that has proven results in their investment returns. Also, our fintech “businessman” Governor (his Royal Con-Man King Ned Lamont the Unaccountable) could call for a full real time and coherent disclosure of all pension business, so that crony dealings (such as his wife’s assets being placed into the pension via manager Hamilton Lane) can come to immediate light. Also, will we ever live to the day when we will see any one legislator have the courage to advocate for “defined contribution” Section 401(k) or 403(b) pension plans for new hires instead of the current bankrupting system?  Further, as much as there been some recent increases by new hire state employees to increase their required payments into the fund, it as a drop in a bucket. Connecticut's pension still is unfunded by roughly 50%.  Cut spending and invest pension funds wisely.  But with all of the fingers in the pie, we know this type of courage and reform will never happen in Connecticut. 

When Connecticut Taxpayers run out of money and the state's debt escalates to the point of no return, maybe we will then hear reform is needed.  Do not count on it.  Also do not count on any politically connected individuals proposing solutions to the pension Armageddon being laid across the backs of Connecticut vassal-like taxpayers. Debt is the solution of constant omnipotent Democrat party control and power in Connecticut forever.

 

Democrat Connecticut Has Massive Budget Increases Year In And Year Out-Why?

Over the years, I have been asked why a state as small as Connecticut with as little population as it has spends as much money as it does each year?  Unfortunately, It is a very difficult question to answer.  Back in 1991 Connecticut's budget was under $8 billion dollars a year.  The new proposed budget for FY 2023-24 by Democrat Governor Ned Lamont plans to spend over $25 billion dollars each year for a new $50.5 billion bi-annual budget, including another $1 billion dollars or so in new bonding yet again.  If one does some quick math, state spending has increased roughly by 312% in 32 years, or a minimum of 10% per year. When short and long term debt and unfunded liabilities are taken into account, Connecticut's fiscal ditch can be estimated to be roughly $150 billion dollars.  Part of the reason why the state spends as much as it does is because of the fiscal narcotic state income tax available to it along with the over market value and over paid state employee benefits, salaries and pensions it is committed to pay.  Connecticut has seen a net decline in its population and many higher income earning workers flee the state over the past 32 years.  Contrary to the Democrat rhetoric of how great the state is, Connecticut still ranks last and or near last in most business and economic climate categories in the country, while having some of the highest tax rates in the country. 

The new budget sees a similar trend of the past 32 years.  Spending is increased, various taxes have minor cuts while other taxes remain the same and or are increased, while different state groups, local groups, cities, towns, state departments and other advocacy groups complain they need more money and or are not getting enough money to function.  This budget offers some middle class workers a cut in their income tax rates that may save them on average $300 for single filers and a whopping $600 for couples.   Lamont's new budget also offers massive pay raises of 5.5% pay hike in the first year and 4% in the second for judges, that he claims would aid with judge recruitment and retention of these same judges.  I did not realize that judges were so hard to find in the state since they are mostly political appointments.  Thus this years budget follows the narrative that Connecticut's economy has never been better, taxes are being cut by roughly one tenth of one per cent in proportion to the $50.5 billion dollar budget for individual taxpayers, more laws limiting personal freedom will be enacted and the cycle to economic Armageddon has once again been adverted.  In my opinion, truths, lies and deceptions are the yearly norm when it comes to the state budget while obviously throwing more Connecticut taxpayer's money at everything and anything. Again, this standard mode of operating will correct any negative social or economic situation permanently. It always does. 

Reality paints a much harsher picture of the social and economic Utopia called Connecticut.  The state has many long-standing social and economic issues that it just can not shake.  I might be in the minority for calling this out as I see the same problems the state has had year in and year out for well over 30 years now, continue.  One of the biggest issues the state has since it has now accepted permanent Democrat one-party rule is that is has an unsustainable debt and unfunded liabilities funding problem that has never been addressed. How much more will borrowed and never be paid back?  I know the yearly calls for living 

within the budget and other incoherent economic gibberish spewed by elected officials have grown stale.  In my opinion Connecticut spends an excessive amount of money for a state as small as it is with a population as small as it is.   It has an enormous debt problem along with horrifically Democrat run cities that are unsafe economic wastelands and offer little economic freedom for those who live in them.  There are really two different Connecticut's.  The Connecticut that the working middle class must fight daily that offers illogical laws, poor politically correct public education, social unrest, high taxes and crime throughout the state.  The Connecticut that the politically connected and wealthy live in avoids all of this at all costs, for these problems are for the peons who must toil to support the excesses of state government, and not theirs.

It is imperative for Connecticut to cut state spending.  Connecticut needs to address its short and long term debt and unfunded liabilities.  Connecticut needs to address the rampant crime, theft and murders that occur on a daily basis.  Connecticut needs to address its public education crisis.  Connecticut needs to address its infrastructure problems.  Connecticut needs to address its illegal drug crisis.  Connecticut needs real action and not laws that allow for illegal people to vote in its elections nor for legal citizens to be silenced when questioning an elected official on social media.  Connecticut could really use real, honest, and ethical governmental leaders to run the state and not the current profit driven Governor who has skillfully eliminated transparency in his administration.  Connecticut has massive budget increases year in and year out with little to show for it.  It is the Connecticut Democrat Party's debacle to forced social and economic ruin.  And it is 1776 all over again.

Connecticut Taxpayers New $62500 Tax-Part 2

 To continue with several more points from blog last week on 10/9/21 about the massive debt and unfunded liabilities Connecticut has that amounts to $62500 per taxpayer I would like to focus on several possible solutions to this coming bankruptcy for Connecticut.

There seems to be an excessive amount of state employees who receive above averages wages, salaries, benefits and pensions.  Some of these same state employees will state that they deserve these above average wages, salaries and pensions since they work for the state.  Most of them are unionized employees that I assume are unionized in order to protect them from the apparently harsh and inhumane working conditions that they are facing in the state.  Most of them are unionized employees also so that they are  able to receive these above average wages, salaries, benefits and pensions that are funded by the Connecticut Taxpayers.   I and many others can not see what they are being protected from and why they are being paid these above average wages, salaries and pensions.   In turn for this protection these same unions endorse only the Connecticut Democrat Party and their candidates on a local, state and federal level.   Thus we also see a trade off for votes for these above average wages, salaries, benefits and pensions.  There never seems to be a realistic view of what all these above average wages, salaries, benefits and pensions are costing Connecticut Taxpayers nor of how they are contributing to this $62500 debt tax.  Studies have been done over the years discussing these above average wages, salaries, benefits and pensions for state workers but little if anything is done about it.  We also have seen over the years that if a State Representative or State Senator loses an election some of them somehow find a state job with above average wages, salaries, benefits and pensions for themselves.  If they are short years for a state pension it seems like jobs are created for these same State Representatives or State Senators so that their pensions may grow and or be increased in monetary value.  I know of no report over the years that has been commissioned or developed to record the amount of political patronage jobs that were created since 1991 and how much it has cost Connecticut Taxpayers.  I am confident it is in the millions of dollars.  Why are we paying so much in these above average wages, salaries and pensions and receiving questionable if not little to no value for the state in return since the state is so badly managed?  Why can't this issue be addressed?  

Executive Order Governor Ned Lamont has benefited from the never ending Connecticut Covid-19 crisis.  Several companies that his family's hedge fund own have received no bid Connecticut State contracts that they apparently have profited from.  We do not know how much the Governor or his hedge fund has paid in Connecticut state taxes (the last income and tax summary for the Governor was from 2017, I can not obtain any newer information on either personal or business taxes paid from 2018 on)  or how much profit was obtained by these same contracts.  Why is this information so secret?  Does the Governor's family hedge fund even pay taxes in the state?  We do not know nor apparently are we allowed to know as Connecticut Taxpayers.  

One can also argue that for a state as small as Connecticut why is it spending so much money?  Where does the money actually go?  If one looks at the last state budget we see an enormous amount of the state budget goes to debt payments and to state employee wages, salaries, benefits and pensions even though each year we are told there is somehow some sort of shared sacrifice going on to lower these costs.  With a $62500 debt per Connecticut Taxpayer one could argue that the state way overspends on its budget and has little results from it since the state ranks last or near last in most economic categories and near the top in highest taxes in the country.  Connecticut taxpayers are not getting value for their hard earned tax monies.

Connecticut needs a serious austerity based state government economic plan to cut spending, reduce the state's workforce, find ways to save money anywhere and everywhere, do much more with much less and learn what real sacrifice is as Connecticut Taxpayers have learned since the Utopian Lowell Weicker State Income Tax was force fed on them in 1991 taking away their income.  Connecticut needs a real budget for real times that cuts state spending rather than just shove items off budget.  Connecticut's State Government must learn to work for Connecticut Taxpayers not the other way around.   Connecticut needs to change or it will really face bankruptcy sooner than later.  Connecticut Taxpayers don't need to accept this $62500 tax.  It truly is "Taxation Without Representation".